Ten tips for cheaper car insurance

In the unlikely event that any Times Money readers are tempted to upgrade their car – or in the parlance of the street, "pimp their ride" – they might like to think again after research indicates that modifications such as adding a rear spoiler or lowering the suspension could add up to 171 per cent to car insurance.

The study by BeatThatQuote.com, a price comparison website, says that altering a car above factory standards could greatly reduce the chances of even obtaining a quote. Insurers willing to provide a quote declared a 25 per cent mark-up in premiums for the addition of a rear spoiler; 50 per cent for darkened windows; and a whopping 171 per cent for lowering the suspension.

But keeping your car standard is not the only way of driving down the cost of insurance. Here I have outlined ten tips to help you get the best deal.

1. Use a price comparison website such as insuresupermarket.com or confused.com to find the cheapest quote.

2. Compare the best deal against Direct Line, Churchill or Tesco because they do not feed their quotes to the price comparison websites.

3. If you still can’t find a premium cheaper than your renewal quote, some insurers such as Barclays, subject to certain conditions, promise to match it and give you £50 cash back.

4. Try haggling with your existing insurer. Most companies will cut your renewal quote to keep your business.

5. Try applying to your existing insurer as a new customer. Some insurers reserve their best deals for new customers.

6. If possible, park your car in a garage or a driveway rather than the street, as this could cut your premium.

7. Installing an alarm, immobiliser or tracking system can also reduce premiums.

8. Increasing your excess or taking out third party rather than comprehensive cover can also reduce the quote, particularly if your car is a worthless old banger.

9. If possible, always pay your premium in full. Insurers charge interest of up to 30 per cent for customers who pay monthly.

10. Finally, don’t wait for your renewal date –most insurers will refund the rest of your year's premiums, as long as you haven't claimed.

If you know any other useful tips, please share them with readers using the comment form below.

Comments

[Douglas]

Shopping around is always the best option. Every year I do this, both for Household and Car Insurance. There is always one company offering that special deal. This year I saved £104.20 on my household insurance against the current renewal premium, which was inline with the best on-line quote. My last years company even offered to reduce the renewal price by £30.00, and give a cash back 0f £20.00, but this was still way above the deal I had been offered and accepted. I can't help wondering if large numbers of householders are going without household insurance this year, because I have never known Insurance companies be so generous.

[Minnie]

Get married - if we can persuade an insurer to list us as married (which we will be in 6 weeks) our insurance premium will drop by £150. If you're a woman that's the biggest difference you can make to your premium before NCD.

The other ways we are saving money is list the car in my name, rather than my future husband's, and waiting until he has passed his driving test before we add him onto the insurance. Young male unmarried drivers have some of the highest premiums!

The other thing to do is be over 25. That may be harder for some people than others.

[BritishAirman]

Car Insurance is a very competitive market. Insurers, will, in my experience, always be prepared to undercut another if the driver has maintained a no-claims discount for a number of years and avoided any driving offences. For those who have less than perfect records the journey in trying to find a reasonably low-tender will be difficult.

Much of providing car insurance policies comes from agents, or those acting on behalf of insurance companies. Intermediaries within the car insurance industry are particularly useful as they have the expertise and skill in nominating individuals to their insurer's panel, which can comprise a number of different insurers. The agent will then offer a number of quotes based on the disclosures you have given.

An intermediary - such as Kwik Fit Insurance - will, as a matter of course, search the market each renewal and anniversary date in seeking competitive rates. The advantage of this is that any record maintained with a particular agent will carry forward. The inconvenience of having to continually request NCD evidence does not apply. Agent charges are normally charged direct to the insurance companies by the agents themselves for arranging policies and are not normally contained within insurance premiums but this should be a point that is asked and considered when a premium price is quoted.

Buying car insurance will always require an individual to be aware of what he or she is adding into the policy. Everything adds up, which can make a fairly cheap basic policy in the first instance into an expensive weighted policy if other things like legal indemnification, break-down recovery or a higher class of insurance being taken than is actually needed. A pragmatic approach is sometimes the best way in dealing with insurance premiums. For example, do I really need comprehensive cover? What benefits does Third Party Fire and Theft afford?

Careful drivers should be in a position of utilising the market for their benefit. However, continually swapping and changing insurer' will not only create suspicion by insurer's as to why an individual has frequently changed but, in financial terms, will certainly work-out more expensive in the long-run. Try and stay with the same insurer for at least 5-years.

Paying by direct-debit is a good way of spreading the cost, but will incur a small cost that is normally added into the policy. Typically, APRs are very competitive.

[They drive me mad]

My tip is - do not use Direct Line. Unless you are a middle-aged woman driving a Nissan Micra and live in a village outside Worcester they are a ripp off!